MICROSOFT BRACES FOR USER BACKLASH

Microsoft braces for user backlash over downloadsThe next time you visit the Web site of
Microsoft Corp. to download some software, be prepared to let the world’s
biggest software company have a look inside your computer.

In a determined strike to quell the proliferation of counterfeit software,
Microsoft is now requiring that all customers coming to its Web site for
upgrades and other downloads submit their computers to an electronic
frisking.

If you use one of the estimated 100 million PCs running pirated software,
don’t expect your upgrade. For Microsoft, the new policy is a stepped-up effort
to combat the loss of billions of dollars’ worth of software sales every year to
counterfeiters around the world. But in ramping up efforts to fight piracy, the
Redmond, Wash.-based behemoth already finds itself fending off critics over
privacy.

“It sets an extremely negative precedent,” Pam Dixon, executive director of
World Privacy Forum, a non-profit public-interest research center in San Diego,
said of the company’s initiative. “Microsoft is saying, ‘Before I let you do
anything at all, you have to open your computer to us.’ I really object to
this.”

The company will scan machines for a variety of information, including
product keys or software authorization codes, operating-system version and
details on the flow of data between the operating system and other hardware,
such as printers.

It is access to this information that particularly upsets the privacy
advocates. Dixon says the only information Microsoft needs to fight piracy is
the product key and the operating-system version, and she says that Microsoft
will be able to identify users uniquely based on some of the information the
company collects.

“They are grabbing more information than they need to deter piracy,” she
said.

If Microsoft deems a PC to be carrying contraband code, it won’t allow a user
to download Microsoft programs, with the exception of security patches. But the
software company – which says that more than one in five U.S. computers runs a
counterfeit version of its Windows product – is not just waving a stick. It is
also offering a big carrot.

Microsoft said it will give a free copy of its Windows XP to customers who
unknowingly bought a counterfeit version of the operating system and who fill
out a piracy report, provide proof of purchase and send Microsoft the
counterfeit CDs.

Customers who cannot provide proof of purchase but file a piracy report will
receive a substantial discount on a legitimate version of the operating system,
said Tim Prime, a product manager in the Windows client group at Microsoft
Canada Co., a subsidiary of the U.S. company.

Executives at Microsoft reject any suggestions that the move will antagonize
customers with privacy concerns.

“Customers want to know whether retailers have sold them genuine software,”
Prime said.

More than 40 million users agreed to have their systems scanned in a 10-month
trial that began last September in several countries. The participation rate
amounted to 58 percent of all visitors to the pilot Web site, far exceeding
Microsoft’s expectations of just 10 percent, Prime said.

Microsoft said no personal data will be collected during the validation
process, and information will remain completely anonymous. The company said it
commissioned TUV-IT, an independent German security auditor, to test how well
its Windows Genuine Advantage program protects customers’ data. The firm
concluded that Microsoft does not collect any personal information that would
allow it to identify or contact a user.

Seth Schoen, a staff technologist at the Electronic Frontier Foundation, a
civil liberties group in San Francisco specializing in technology issues, agreed
that Microsoft would not be able to identify customers personally through the
program. But the data collected are unique to every customer, just as human
fingerprints are unique, and the issue becomes how long the company holds onto
the details and whether they could become personally identifying later on, he
said.

Technology companies have walked a fine line for years on the issue of
collecting information from consumers’ computers. Six years ago, RealNetworks
Inc., whose software plays audio and video content on the Internet, released a
patch for its RealJukebox program after the public learned the software was
relaying personal information about users to the company.

More recently, Google Inc. created a privacy backlash when it said its free
e-mail service, Gmail, would include special software that inserts ads into
personal e-mails based on their content.

Clearly, Microsoft believes any risk of public-privacy concerns are worth
incurring to fight a problem that has turned into an epidemic in some parts of
the world.

Microsoft has been fighting counterfeit efforts for years with limited
success. It says that 35 percent of the world’s computers run counterfeit
software and that piracy cost the global software industry $33.7 billion in
2004.